Hoosier Hills, Dearborn County credit unions in Indiana merging

Hoosier Hills Credit Union in Bedford, Indiana, and Dearborn County Federal Credit Union in Lawrenceburg, Indiana, have agreed to merge.

Approval is pending a member vote at Dearborn, which has $15.9 million of assets and around 2,000 members, and regulator sign-offs. Hoosier Hills has $831 million of assets and around 33,000 members.

The move comes as credit unions in the U.S. are increasingly consolidating to stay competitive in a space where banks and alternative payment providers are eroding profit margins for smaller credit unions. 

Almost two-thirds of federally insured credit unions have less than $100 million of assets, and face many business challenges in the new banking landscape, according to the National Credit Union Administration.

In Dearborn's case, “Because it has become more difficult to absorb the increasing costs of compliance, information security and technology, we voluntarily made the strategic decision to find a long-term partner with a similar culture and philosophy around member service, employee engagement and community involvement," Katee Goodpaster, Dearborn County Federal Credit Union's chief executive, said in a press release. 

The credit union's core software was sunsetting and to convert it meant "outrageous" costs, Goodpaster said. In addition, after the hospital where they were based was sold to a hospital in another state, it cut staff, thus reducing membership in the credit union, she said. 

"We were still profitable," Goodpaster said, but given the situation at the hospital, "we would have had to change our entire business structure and charge more fees" to keep going. 

Dearborn County Federal Credit Union has six employees, including Goodpaster, and has been in operation for 60 years. The merger will allow the credit union to expand, opening a new branch in the region. 

"The decision was fairly easy when you take into account the similarities between our two organizations," including their approaches to service, their internal culture and their focus on community, said Travis Markley, president and chief executive of Hoosier Hills Credit Union. Hoosier Hills has 180 employees and nine branches across two states. 

Goodpaster will become the vice president of operations at the Lawrenceburg-area locations, and Markley will be the head of the combined credit union.

The merger is expected to close on Nov. 1, 2022, pending approvals.